The macrolides are microbial natural products with many uses in human and veterinary medicine. Erythromycin is the best-studied example of a macrolide antibiotic; rapamycin, and FK506 are promising new immunosuppressant macrolides. The price and availability of macrolides depend on their production efficiency, and therefore to a large extent on the genetics of the producing strain. Over the last ten years, university scientists have shown that positive regulators of antibiotic production can dramatically increase the production level of model antibiotic compounds such as actinorhodin. In Phase I of this study, FermaLogic scientists performed analogous experiments in a commercially important macrolide-producing strain and obtained results showing yield- enhancing results by putative positive regulators of macrolide biosynthesis. In Phase II we are proposing to further characterize the DNA fragments responsible for the yield enhancing effects found in Phase I. The positive regulatory features of the clones found will be optimized and tested for additive or synergistic effects. The effect of the positive regulators will be tested in other Streptomyces strains to test the effect on the biosynthesis of other antibiotics. PROPOSED COMMERCIAL APPLICATION: Positive regulatory genes of macrolide biosynthesis may significantly reduce the cost of production of important bulk pharmaceuticals as well as specialty chemicals and therefore would be of interest to the industrial producers of macrolides including major pharmaceutical companies located throughout the world.